Sterling followed the euro downwards yesterday after credit rating agency S&P put 15 out of the 17 euro zone countries on notice for a downgrade. Poor retail sales figures and housing surveys contrasted with stronger than expected industrial data from Germany, also highlighed the fragility of the UK economy.Survey by the British Retail Consortium showed that retailers suffered their biggest annual drop in like for like sales since May. UK data has been particularly poor of late and as a result, sterling has taken a punishment as the euro crisis deepens.

In the euro zone, the euro fell against the US dollar as investors focussed on the unprecedented warning issued by rating agency S&P. With the credit warning including France and Germany, investors are increasingly concerned over these perceived 'safer' countries and their abilities to repay their debts. With the ECB widely expected to cut interest rates on Thursday and the EU summit set to deliver a day of volatility it is set to be an interesting few days on the currency markets.

In the USA, it was a fairly quiet day in terms of data with no real significant releases. With markets waiting for the EU Summit on Friday and the ECB interest rate decision tomorrow morning, there is no clear direction as to the US dollar's direction ahead of the New Year. Friday will be a key day that decides the movement for the coming months so call in now to ensure you don't lose out.

Elsewhere, the Swiss franc continues to come under pressure after an array of poor figures and talk of the Swiss National Bank increasing its floor on Euro/ Swiss franc to €1.25/€1 or more. Call in now to ensure you are protecting yourself ahead of Friday's summit.

Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.